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Let’s mug a startup founder

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Re: Let’s mug a startup founder

#21

Post by arturadib »

ry0ohki wrote: post #4

From their FAQ ( http://oxygenaccelerator.com/accelerator/faqs/ ): When do I have to pay the pre-seed funding back? Don’t worry, we really don’t want you to hand over the keys to your house or car – this is a soft loan. Our interest is in your success and therefore will only look for the loan to be repaid when it makes sense for your business. This will be done on a case-by-case basis.

This is asking for trouble -- it's really ambiguous, and can easily lead to troubled waters in the near future.

Anyone who's lost money in their startup investment knows what I'm talking about. ("Oh yeah, I know it's risky, don't worry" ... "Wait, did you try hard enough? What are going to do, jump ship NOW??")

Their idea of an "evergreen" fund is cute, but it's ultimately flawed. Most startups fail.

Re: Let’s mug a startup founder

#22

Post by ryancarson »

lionhearted wrote: post #6

So that's around $33k USD. They're only looking to be paid back if you reach profitability. 6% equity to get a $33k loan and some sort of training/advising for 13 weeks at their facility, and office space afterwards? Could be a good deal, especially if you have a new business that requires medium amounts of capital costs to get started. If you're getting something manufactured and your first run/prototyping/etc is go…

The whole reason I wrote the post is because they're acting as if it's normal to ask for equity for a loan (and a tiny loan at that). YC, TechStars, Seedcamp, etc all invest in their companies - not loan them money.

The whole thing smacks of a rich guy who just thinks he can throw around his money, call it an 'accelerator' and take candy from babies.

I'm doubly angry because here in the UK, we're struggling to get support for new startups and entrepreneurs. Shady deals like this only make it harder for people who genuinely want to support startups (like Seedcamp) to gain traction in the mainstream media.

Re: Let’s mug a startup founder

#23

Post by ryancarson »

repoleved wrote: post #17

This is an interesting post from an unlikely source. I think carsonified Wil soon be the Arrington of bullshit startup advice. Just trying to peddle those CSS3 How To Videos...what a joke.

I guess the fact I've started four companies doesn't count :)

- One acquired - One failed - One currently humming along profitably - One currently growing at an insane pace (thankfully!)

Re: Let’s mug a startup founder

#24

Post by forkqueue »

mhd wrote: post #20
ry0ohki wrote: post #4

From their FAQ ( http://oxygenaccelerator.com/accelerator/faqs/ ): When do I have to pay the pre-seed funding back? Don’t worry, we really don’t want you to hand over the keys to your house or car – this is a soft loan. Our interest is in your success and therefore will only look for the loan to be repaid when it makes sense for your business. This will be done on a case-by-case basis.

This sounds a bit suspicious to me, i.e. I couldn't help but reading this in a fake Brooklyn/Jersey accent wise guy accent. How are such loans handled in the UK regarding liability? I mean, if you have a limited company, does one of the founders have to vouch for it with his personal possessions (as it's often handled here in Germany, for obvious reasons)? Yes, if you're doing good, they won't be hasty in getting the…

In the UK the liability of directors is limited to the nominal value originally invested (usually £100).

Re: Let’s mug a startup founder

#25

Post by commondream »

repoleved wrote: post #17

This is an interesting post from an unlikely source. I think carsonified Wil soon be the Arrington of bullshit startup advice. Just trying to peddle those CSS3 How To Videos...what a joke.

Dude, you're rewinding all the work I've done on trying to tell others how amazing and friendly the web community in Greenville is. How about some substantial examples about Carsonified's bad advice instead of just trashing us?

Re: Let’s mug a startup founder

#28

Post by hessenwolf »

mhd wrote: post #20
ry0ohki wrote: post #4

From their FAQ ( http://oxygenaccelerator.com/accelerator/faqs/ ): When do I have to pay the pre-seed funding back? Don’t worry, we really don’t want you to hand over the keys to your house or car – this is a soft loan. Our interest is in your success and therefore will only look for the loan to be repaid when it makes sense for your business. This will be done on a case-by-case basis.

This sounds a bit suspicious to me, i.e. I couldn't help but reading this in a fake Brooklyn/Jersey accent wise guy accent. How are such loans handled in the UK regarding liability? I mean, if you have a limited company, does one of the founders have to vouch for it with his personal possessions (as it's often handled here in Germany, for obvious reasons)? Yes, if you're doing good, they won't be hasty in getting the…

Reason number seven million we are not registered in Germany.

Seriously, though, how difficult is it to get a limited liability going in Germany? Moving there next month.

Re: Let’s mug a startup founder

#29

Post by phlux »

vladd wrote: post #18
ry0ohki wrote: post #4

From their FAQ ( http://oxygenaccelerator.com/accelerator/faqs/ ): When do I have to pay the pre-seed funding back? Don’t worry, we really don’t want you to hand over the keys to your house or car – this is a soft loan. Our interest is in your success and therefore will only look for the loan to be repaid when it makes sense for your business. This will be done on a case-by-case basis.

It's like saying: give me your house and don't worry, despite the property transfer, I'll allow you to continue to stay there for free; evictions will be done on a case-by-case basis.

Not really, Orrick has a startup legal package where they give you a bunch of legal guidance, advice and documents as well as get you incorporated etc.

Typically, its $10,000 or more in legal help. They dont require you to pay them unless you raise at least $500K in funding -- if you crash and burn before hand and your startup falls apart - they do not ask for any payment.

This happened with me in the past - and I would further recommend their services to anyone.

Re: Let’s mug a startup founder

#30

Post by sreitshamer »

lionhearted wrote: post #10
tomstuart wrote: post #7

Earlier quoted context omitted.

It doesn't say anything about not having to pay it back if you don't reach profitability. Their answer to "Do I have to pay back the pre-seed funding?" is "Yes".

Did you stop reading right there? Here's the next line - > When do I have to pay the pre-seed funding back? Don’t worry, we really don’t want you to hand over the keys to your house or car – this is a soft loan. Our interest is in your success and therefore will only look for the loan to be repaid when it makes sense for your business. This will be done on a case-by-case basis. It makes it sound like the loan is to t…

Phrases like "Don't worry" and "Trust us" would cause me to walk away immediately.
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